Business of Office

It’s much easier to be environmentally pure in opposition than in government.


Listener: 27 March, 2014


Keywords: Environment & Resources; Political Economy & History;


Last year, a blogger argued that the Green Party did not need to engage with business interests while in opposition since whatever it did, it would win no votes from that sector. Perhaps, but if the Greens were to win seats at the Cabinet table, they would face a very different situation. Elections are about winning office; governing is about exercising power after you have office.

This was well illustrated in the middle of 2000 when the just-elected Labour-led coalition faced a winter of discontent from business groups. (One Cabinet minister described it as “a strike of capital”.) It arose because businesses thought the new Government was almost totally ignoring their concerns.


You may think politics is about “we won, you lost, take that”. Had not the previous pro-business National Government (although not as pro-business as this one) lost office? Should not it and its friends have to live with the voters’ decision?


But a New Zealand government does not have unlimited power. What it can do is constrained by overseas factors, by the law and by interest groups, business among them. The caveat is that it is often unwise to treat business as monolithic.


That governments – even dictatorships – do not have unbridled power is not unique to New Zealand; popular uprisings can topple tyrants.


Any Labour-Greens coalition government will have to work with businesses. That will not be easy, because there is not a lot of business expertise in their caucuses. (The National caucus lacks expertise in other areas.) Part of an opposition’s preparation for office is finding lasting connections that enable it to use its power more effectively.


This is not a matter of siding with a few micro-industries. The Greens are inclined to cosy up to environment-promoting industries. These may need a boost, but they are only a minor part of the commercial world.


On the other hand, there are some parts of business that an environmentally friendly government may want to distance itself from. I am not opposed in principle to fracking to extract shale oil. But I am uneasy about the newness of the technology and think New Zealand should stop fracking until the problems have been resolved elsewhere.


I am not as opposed to offshore drilling, which has been done longer, providing it is subject to best international practice. (So, yes, I am prepared to risk the low possibility of pollution – economics is about trade-offs.)


“Dirty dairying” is a disgrace, but the way for a serious government to handle it is to go to the dairy industry, explain that clean water is a priority and discuss how they can work together for that goal.


A nice illustration is one that followed the winter of discontent: the Labour-led Government set up a consultative process with business. Neither side got all it wanted, but they identified where they could work together. One area was transport; its infrastructure was getting increasingly inadequate as the economy thrived.


The present road-building programme came out of that agreement. It takes time to get serious policies under way. But it was also accepted that railways had a role, as did public transport. The business community wants to get commuters off the roads to free them up for trucks.

The broadband rollout is a later such initiative.


Business has an important role in promoting the welfare of New Zealanders. But to repeat an old saw, business success is not the ultimate end of the economy, although social success depends on business success.


I am not sure this Government has the right balance. But it would be of no advantage to New Zealanders for the next government to be as unbalanced in the opposite direction.